Self Employed Health Insurance Deduction
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest second stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
Level 1

Self Employed Health Insurance Deduction

I am an owner in an S-corp LLC and I came to the self-employed health insurance deduction. My family "insurance" is a Christian Sharing Ministry. My daughter is also receives Medicaid Buy-In benefits for in our state as her diagnosis allowed this coverage. Since the Christian sharing ministry is not technically insurance I'm guessing this is not deductible. But since it is an exempt option under the affordable care act, I want to make sure whether or not I can deduct it. Also are the premiums paid to the Medicaid Buy-In program deductible in this section?

6 Replies
Employee Tax Expert

Self Employed Health Insurance Deduction

 If it is not health insurance, it is not deductible.  You can check with the Healthcare Marketplace to see if Medicaid Buy-in is minimum essential coverage. Most Medicaid programs are considered "minimum essential coverage".

 

Please see the qualifications for self-employed health insurance.

 

Self-Employed Health Insurance Deduction

You may be able to deduct the amount you paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance can also cover your child who was under age 27 at the end of 2019, even if the child wasn’t your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

One of the following statements must be true.

  • You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040).
  • You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), box 14, code A.
  • You used one of the optional methods to figure your net earnings from self-employment on Schedule SE.
  • You received wages in 2019 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2.

The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business.

  • For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual.
  • For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or the partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan won’t be considered to be established under your business.
  • For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or the S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 in box 1 as wages to be included in your gross income. Otherwise, the insurance plan won’t be considered to be established under your business.

Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer can’t be used to figure the deduction.

 

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Level 2

Self Employed Health Insurance Deduction

I'm self-employed and got health insurance through the marketplace in 2019. My 24 year-old son was covered for January, then he was covered by employer insurance. He files separately. I had a premium tax credit of $250 to pay back for that month. We decided to make it 100% mine and 0% his. Then he e-filed his taxes. I ran the error check on mine, and it says for Form 1095-A: "Shared Policy Adv PRC Pct policy allocarions for a Form  1095-A linked to a business, Business Related Premiums Smart Worksheet below are not supported." 

Key background:

I am self-employed and have a net profit.

My son is 24 and already filed his return.

The insurance plan is under my name. 

I'm not sure how to fix my taxes.  Will it really not count as a business deduction?

 

Thank you.

 

 

Employee Tax Expert

Self Employed Health Insurance Deduction

No, it counts, but the worksheet needed to calculate the amount is not supported.     

 

Self-employed health insurance deduction

 

  • To get this deduction, your Schedule C must show a net profit.
  • The deduction amount generally cannot exceed your net profit amount.
  • If you (or your spouse if filing jointly) was eligible to participate in an employer's health plan during any given month – even if you declined the coverage – the premium you paid for that month cannot be claimed under this deduction.
  • Health insurance premiums you paid for your child, even if you aren't claiming him/her as a dependent, is eligible for this deduction as long as your child was age 26 or younger at the end of 2019.
  • The self-employed health insurance deduction shows up on Schedule 1, line 16.

 

After you enter your premiums in the self-employed business expense section (or the Affordable Care Act section if you received a 1095-A) we'll check to see if you qualify.   Check Schedule 1, Line 16 to verify you got a credit.   

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Level 2

Self Employed Health Insurance Deduction

Thank you so much!

Does that mean I can just ignore it and e-file, or should I print it out and mail them in? 

~ Susan

Employee Tax Expert

Self Employed Health Insurance Deduction

You don't have to mail anything as long as the e-file gets accepted.  Submit your return (once you are sure you got your deduction) and see if it gets accepted.  That usually takes an hour or so after you submit.   @Susan80

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Level 2

Self Employed Health Insurance Deduction

Excellent! Thank you so much, Dawn! You saved my good night's sleep!

Dynamic Ads
v
Privacy Settings